Libya’s Biggest Oil Field Restarts

Sharara resumed production and is expected to reach 80,000 barrels in one day, according to people with knowledge of the matter who asked not to be identified because they aren’t authorized to speak to the media. Regular output will be fully restored in the coming days, now that the site has been re-secured after a three-month occupation at the site, state energy producer National Oil Co. said in a statement.

The field in southern Libya has a capacity of 300,000 barrels of crude a day. It was shut down in December after guards and armed residents seized it over financial demands and was then taken over last month by forces loyal to eastern militia leader Khalifa Haftar.

The NOC “has received assurances that site security has been restored, verified by our own inspection team, enabling staff to return to work,” Chairman Mustafa Sanalla said in the statement, which urged that the oil company remain “free from extortion and armed incursion.”

The shutdown led to $1.8 billion in lost production, according to the statement.

The company officially lifted its declaration of force majeure, a legal status protecting the NOC from liability if it can’t fulfill a contract for reasons beyond its control. Plans are also in place to repair 20,000 barrels per day of production capacity destroyed by looting and vandalism during the blockade, according to the statement.

Oil rallied this year as the Organization of Petroleum Exporting Countries and allies agreed to reduce output by 1.2 million barrels a day in the first half of 2019 to avert a supply glut. Libya was exempt from the cuts because of its internal turmoil but its oil production disruptions along with U.S. sanctions on OPEC members Venezuela and Iran restricted supplies further. The producers’ group will meet again in April to discuss whether to continue the supply reductions in the second half.

“Officially, inflation is low in China, but the reality is not so cheery: “Domestic sentiment is definitely very bad, perhaps even worse than during the 2008 global financial crisis,” said Fred Hu. Recall that wages for college graduates are around $1,100 per month (7600 RMB), with $1,500 per month (10,000 RMB) being an above-average salary. While white-collar wages are $13,000 annually, apartments in first and even second tier cities are similar in cost to desirable U.S. cities. Rent for a small flat is $800 USD in Shanghai, more than half the average salary, and typically cost hundreds of thousands of dollars to buy. As I’ve noted before, roughly 3/4 of all household wealth in China is tied up in real estate, where it is effectively dead-money, earning no yield and largely illiquid outside of Beijing and Shanghai. Reflecting a broad malaise, China’s stock market has dropped by 25% in 2018 while its currency weakened against the USD (by official design, of course). One question no one is asking seems glaringly obvious: if everything is going great in China’s economy, why did President Xi feel compelled to declare himself president for life? Why is China rushing to install an Orwellian system of monitoring of behavior, online activity, etc., with heavy penalties for those who violate official norms? Here’s another obvious question: what is it saying about China’s future prospects that those who know China best (i.e. insiders) are fleeing the yuan and moving their capital overseas? We might also ask why critics of official policy are censored or even swept out of view. Are these the actions of a secure, confident ruling elite? The short answer is no, and some of that insecurity is undoubtedly the result of the increasingly fragile nature of China’s growth story. Simply put, trade is only one manifestation of much deeper economic insecurities and imbalances.”

“Which brings us back to today’s beige book, and one specific disclosure which suggests that the broader semiconductor space – by many seen as a leading indicator for China’s economy – is about to implode.”

“Two [firms] reported substantial drops in sales and two reported significant weakness. The two firms that reported serious issues were a semiconductor manufacturer and a furniture builder…. The semiconductor firm sells mostly to the auto industry and said that a 40 percent drop in new orders from China was the biggest fall in sales since the collapse of Lehman in 2008. Two other firms, both with heavy exposure to semiconductors, said that the market had slowed significantly since earlier in 2018 – Link.”

Davy on Wed, 6th Mar 2019 8:26 pm

I’ll have to say though, I sure do like my Asian solar panels. I act like the big patriotic American, but I don’t spend my money where my mouth is.

How can we ever expect to “Make America Great Again”, with hypocrites like me?

Davy on Sat, 9th Mar 2019 5:10 am

Hi Guys,

I’m so sorry PO.com readers for losing my shit this morning. I realize it’s not too difficult to figure out I routinely engage in identity theft and deploy multiple sock puppets.

Why? I am sick.

Not Davy on Sat, 9th Mar 2019 5:14 am

Davy on Sat, 9th Mar 2019 5:10 am

JuanP on Sat, 9th Mar 2019 5:14 am

Hi Guys,

I’m so sorry PO.com readers for losing my shit this morning. I realize it’s not too difficult to figure out I routinely engage in identity theft and deploy multiple sock puppets.